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Rotman Insights Hub | University of Toronto - Rotman School of Management

Value Creation in Healthcare

Value Creation in Healthcare

You worked as a leader on the front lines in healthcare for more than 20 years. In your view, what is the industry’s greatest challenge?

One of the greatest healthcare challenges is leading transformation within a culture that has been pretty static for the last 20 years, and within an operational conundrum that doesn’t have a lot of slack to innovate or learn how to do things differently. Both culturally and operationally, there are barriers to positive change.

Canada currently ranks 9th out of 34 OECD countries in terms of healthcare outcomes, and 10th in terms of access. Is our system still world-class?

It is not, and I believe these rankings are a call to action. One of the key issues is our wait times. There are major variations in wait times for different surgeries. Outcomes are another issue. We do hip and knee surgeries very well, but we really don’t follow through on what happened with the patient following the surgery: What were his or her social, physical, and mental outcomes as a result of that surgery? We’re not capturing the outcomes that matter to patients. And a third reason for the ranking is that access to general physicians is still not where it should be. These are all things that should concern consumers and healthcare leaders.

You have said that improving the situation entails removing the waste and using the newly freed-up space differently. What would this entail?

Don Berwick is a thought leader in the healthcare arena who headed up the Institute for Healthcare Improvement (IHI) for many years. He has been closely followed by our academic hospitals in Canada — in fact, the IHI has provided ongoing training to many Canadian healthcare executives. Dr. Berwick has shared that in the U.S., 30 to 40 per cent of healthcare spending is waste. In Canada, because

we’ve been more frugal with our public system, maybe it’s a bit lower — let’s say, it’s around 20 per cent waste. But that works out to $42 billion.

The analogy I like to use is to think about your closet. If you pull everything out and put back in only the items you really need, you’re going to create a lot more space, and you’re going to have an opportunity to bring in some new items that updates your wardrobes. Within healthcare, we should be doing this all the time — taking away some of the waste in terms of outdated processes and technology and adding technological advances. For example, why is it that, if three people cancel their procedure in a day, the clinic shuts down at 2:30 pm, rather than having three people waiting on-call to fill those spaces right away? Even hair salons do that. There are so many simple solutions and processes that can be scaled across multiple systems.

In your view, what is the greatest opportunity for value creation at the moment?

I think there is great opportunity within our emergency rooms. I worked in this environment for eight years, and even back then, we saw lots of people with simple issues who did not need to be in the ER. Many things can, and should, be dealt with by a GP.

In my view, the biggest opportunity is to make access to family physicians 24/7. That would help to keep the emergency room just for acute episodes, like a heart attack or stroke, and acute care. In my mind, this is the biggest area of improvement where we can add value quickly. Then, if we can get patients on the other end out of hospital faster, that would help the overall flow of integrated patient care. For example, instead of a patient staying at the hospital for four days after cardiac surgery, we could send them home two- or three days post-op, with some outstanding homecare. That would lead to significant savings and overall decreased wait times.

Can innovation and, in particular, AI address some of these issues?

Absolutely, but only if we have the connectivity required to capture the right data. Again, a big issue for Canada is that we don’t have integrated, easily accessible data. I’m sure that in our operating rooms, there are still nurses who capture their activity on Excel spreadsheets, and that spreadsheet is not connected to any database. We aren’t capturing the data required to create artificial intelligence. My watch does this every day: It gives me a nudge saying, It’s time to go for a walk. It’s monitoring me, and at the same time, it’s connected to Apple, which is monitoring millions of people like me and capturing data about our behaviour. We just don’t have that IT integration in healthcare. The vast majority of data is still collected manually.

Data issues aside, why does it take so long to get innovations to market in the healthcare arena?

In Canada, we have 15 different healthcare systems, and they all have different governance and approval models. As a result, once a company gets approval for a technology or a new drug, they have to go province-by-province to get it approved via a health-technology assessment. Some of that will be done generically, from one province to another, but sometimes provinces will ask for their own health technology assessment. That really slows timely access.

Then there are the funding issues. For the last five or six years, there has been no new funding for healthcare, and that means organizations have to find the funding from within. If they’re going to fund, for example, a new technology like a stent retriever for use in stroke victims, they basically have to flip the funding from one area to another. Stent retrievers remove blood clots in minutes, and I think most healthcare leaders actually get how much cost can be avoided when we do that, but no one rewards them for making these decisions.

Tell us a bit more about the stent retriever, which is a prime adoption case study for a game-changing technology.

Solitaire is a stent retriever that has the ability to go into an artery and, within 90 seconds, locate and remove a clot. It basically goes in, wraps itself around each side of the clot, harnesses it, and pulls it out. The tool also has a little suction device that sucks out all the micro-pieces of blood, so that the patient doesn’t have any mini-strokes. The individual is awake during the procedure, and very quickly feels the outcome.

This is just an example of something that is both life-altering and system-altering. It’s a must-have technology. However, Medtronic’s data shows that out of 10 people who should get this done today, only five or six will get access to it. We still have a long way to go to make access tenable for all Canadians.

You believe patients and their advocates should make more specific demands of caregivers. What would that look like?

As people become better educated about their health, I think we’re going to see a lot more of this. I’m a Baby Boomer myself, and my peers are very health-conscious and educated. Nevertheless, I always say, the minute you put on a green or blue Johnny coat and lay on a stretcher, make sure you’ve got an advocate standing over you. It is so important to have someone who can ask questions and challenge what is being said and done on your behalf. I think the Baby Boomers will be very demanding, number one, because they are doing their own research and demanding improved access and care. If they don’t get it, many will seek out private care, which we’ve already started to see.

Are you hopeful that things will improve in the Canadian system?

Definitely, particularly due to the rise of value-based healthcare. That is the new healthcare delivery model that is increasingly being adopted, whereby providers — including hospitals and physicians — are paid based on patient outcomes. This differs from the traditional fee-for-service approach, in which providers are paid based on the quantity of services they deliver.

As this model is embraced, innovation at companies like Medtronic will continue, but innovators will have to recognize that they can’t just keep throwing new technologies at the healthcare system without being able to show their value. Going forward, the position of healthcare organizations is going to be, We won’t pay for this product until we know for sure that it will create value. The good news is that, increasingly, companies like Medtronic are happy to be paid based on outcomes and patient experience.

This article originally appeared in the Spring 2018 issue of Rotman Management magazine.


headshot of P. WinsorPamela Winsor recently retired from her role as Senior Director, Stakeholder Engagement, Value-Based Healthcare & Chief Marketing Officer at Medtronic Canada. The one-time emergency-room nurse is a graduate of The Judy Project, a program at the Rotman School of Management that is designed to support and prepare women as they ascend into executive leadership.